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Movie theaters forced to survive another bad box office year

Apr 17, 2024
Illustration of an hourglass with popcorn instead of sand.

Illustration: Gabriella Turrisi/Axios

Movie theaters are looking at another year of survival as hopes for box office stability remain at least another year away, according to multiple film industry executives Axios spoke with during last week's CinemaCon in Las Vegas.

Why it matters: The uncertain future of the movie business is forcing more theater chains to either declare bankruptcy or look for an exit ramp.

State of play: A general sense among movie theater executives has set in that the industry, which already needs a cash infusion, is likely headed for more contraction.

  • "There are too many screens in North America," Imax CEO Rich Gelfond says.
  • In 2019, there were more than 41,172 movie theater screens in the U.S. That number is now somewhere between 36,000 and 38,000, per various industry estimates.

Catch up quick: Metropolitan Theatres Corp., a small family-owned chain that operates 16 theaters in California, Colorado and Utah, filed for Chapter 11 bankruptcy in February.

  • Alamo Drafthouse, which itself went through bankruptcy in the early days of the pandemic, is pitching itself to studios as an acquisition target, though it has yet to find a bidder, per Deadline.
  • The two largest theater chains have had their own share of financial issues. Cineworld went through bankruptcy and emerged as a private company with a smaller footprint, while AMC still has more than $4.5 billion in long-term debt.

The big picture: The question on many theater owners' minds is whether the box office can ever return to the yearly $10 billion industry it had been for the decade prior to the pandemic.

  • Despite the success of Barbenheimer, theaters were kneecapped last year by the Hollywood labor strikes, which caused delays that upended this year's slate.
  • And this year's box office is expected to fall back to $8 billion, after nearly hitting $9 billion in 2023.
  • "If the box office is at $8 billion, which means it would be 27% down from what was normal, yeah, that's gonna put a lot of people under stress," AMC CEO Adam Aron said during an industry panel.

Yes, but: Most executives remain bullish that the tide will finally turn in 2025, when studio output is expected to be much higher.

  • Some pointed out to Tim that this was the first year since the pandemic that every major studio appeared to be all-in on the theatrical experience over streaming.
  • "Many people chasing the Netflix model obviously regret that," Tom Lesinski, CEO of National CineMedia, an ad network for movie theater screens, says. "People realize that the sequential distribution model is actually a pretty good one and maybe the multiple that we were chasing wasn't really ever going to happen."
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